New Kinds of Water Power Spark a Buzz!

While the total installed capacity of emerging "second generation" marine hydrokinetic resources was less than 10 megwatts (MW) at the end of 2008, a recent surge in interest has generated a buzz, particularly in the United Kingdom, Ireland, the United States, Portugal, South Korea, New Zealand and Japan.The next five years will determine whether these sources are THE NEXT BIG THING, or delegated to niche markets.

The United Nations (UN) projects that the total “technically exploitable” potential for waterpower (including marine renewables) is 15 trillion kilowatt-hours, equal to half of the projected global electricity use in the year 2030. Of this vast resource potential, roughly 15 percent has been developed so far. The UN and World Energy Council projects 250 gigawatts (GW) of hydropower will be developed by the 2030. If marine renewables capture just 10 percent of this forecasted hydropower capacity, that figure represents 25 GW, a valid possibility and the likely floor on market scope.

Literally hundreds of technology designs from more than 100 firms are competing for attention as they push a variety emerging marine renewable options. Most are smaller upstart firms, but a few larger players – Scottish Power, Lockheed Martin and Pacific Gas & Electric -- are engaged and seeking new business opportunities in the marine renewables space. Oil companies, Chevron, BP and Shell, are also investing in the sector.

The five technologies covered in a Pike Research report authored by your truly and released on June 1st(www.pikeresearch.com) are the following:

Wave energy technologies more often look more like metal snakes that can span nearly 500 feet, floating on the ocean’s surface horizontally, or generators that stand erect vertically akin to a buoy. Any western coastline in the world has wave energy potential.

River hydrokinetic technologies are also quite similar to tidal technologies, relying on the kinetic energy of moving water, which can be enhanced by tidal flows, particularly at the mouth of a river way interacting with a sea and/or ocean.

Ocean current technologies are similar to tidal energy technologies, only they can tap into deeper ocean currents that are located offshore. Less developed than either tidal or wave energy, ocean current technologies, nevertheless, are attracting more attention since the resource is 24/7.

Ocean thermal energy technologies take a very different approach to generating electricity, capturing energy from the differences in temperature between the ocean surface and lower depths, and can also deliver power 24/7.

The superior energy content profile of all of the marine renewables translates into a distinct advantage over popular solar and wind power technologies: far less capital cost per unit of electricity generated. The high capital costs associated with renewable energy technologies in general is largely avoided with marine kinetics. “The capital costs of marine renewable energy systems will be 50 to 100 times smaller than investments required to create the same amount of electricity from either wind or solar,” said one marine renewable energy advocate. The downside for marine renewables is the unknown O&M costs. Whereas O&M represents 10 percent of total project costs for solar, and 20 percent for wind, 40 percent is a ballpark guess for marine renewables. Keeping O&M costs down to 40 percent of total project costs is the key to making these marine resources competitive.

The demand for energy worldwide will continue to grow at a dramatic clip between 2009 and 2025, with renewable energy sources overtaking natural gas as the second largest source behind coal by 2015 (IEA, 2008). By 2015, the marine renewable market share of this renewable energy growth will still be all but invisible as far as the IEA statistics are concerned, but development up to that point in time will determine whether these sources will contribute any substantial capacity by 2025.

By 2015, Pike Research shows a potential of over 22 GW of all five technologies profiled in this report could come on-line. Over half of this potential capacity is older first generation “tidal barrage” projects, the largest of which – up to 14 GW in the U.K. – is highly contentious. Pike Research projects a base case of only 2.7 GW of all five technologies coming on-line by 2015, unless meaningful carbon regulations are adopted in the U.S. this year and global efforts combating climate change gain traction. If effective carbon regulations are enforced, the total global capacity will be closer to 4 GW by 2015 and could reach 10 GW, this latter optimistic scenario representing a market value of in excess of $20 billion.

The European Union’s (EU) Ocean Energy Agency has suggested that 10,000 MW could come on-line to meet EU demand by 2020, growing to 200,000 MW by 2050. Europe is likely to be the global leader, but these capacity totals do not include river hydrokinetics, ocean current or OTEC.

By 2025, at least 25 GW of total marine renewables will be developed globally. If effective carbon regulations in the U.S. are in place by 2010, and marine renewable targets established by various European governments are met, marine renewables and river hydrokinetic technologies could provide as much as 200 GW by 2025: 115 GW wave; 57 GW tidal stream; 20 GW tidal barrage; 4 GW ocean current; 3 GW river hydrokinetic; 1 GW OTEC